Lucrative perk remains for those fired from state jobs

Tuesday

Jan 26, 2010 at 12:01 AMJan 26, 2010 at 12:28 PM

Although Gov. Deval Patrick and legislative leaders call a pension reform bill passed last year a major step toward restoring public trust in government, they left in place a questionable pension perk that has allowed hundreds of public employees who are fired or whose positions are eliminated to begin collecting lucrative state "termination pensions'' while still in their 40s and early 50s.

Michael Jonas

Gov. Deval Patrick and legislative leaders hailed a pension reform bill passed last year as a major step toward restoring public trust in state government, but they left in place a questionable pension perk that has allowed hundreds of public employees who are fired or whose positions are eliminated to begin collecting lucrative pensions while still in their 40s and early 50s.

The so-called termination pensions have put the state on the hook for millions of dollars in payouts to former state workers, including cabinet officials who have moved on to high-paid private sector posts while pocketing monthly pension checks years before reaching the standard state retirement age of 55.

The pensions, which are available to those with at least 20 years of service, have been justified as a way to protect long-term state workers who are pushed out the door when a new administration takes power. But in practice the pensions have also been going to top-level executive branch officials — including lots of former legislators — who rode up the ladder through political connections but then grabbed at the pension perk, which pays roughly 40 percent of a worker’s salary, when the same political spoils system they benefited from turned against them.

Among those who have seized on the generous pension benefit is former state senator Robert Durand, who was named in 1999 by his longtime friend Gov. Paul Cellucci to serve as secretary of environmental affairs. Durand was replaced by incoming Gov. Mitt Romney in 2003. But it was a soft landing for the Marlborough Democrat, then age 49, who began collecting a termination pension of $43,229 a year when he left state government to start his own consulting business.

Andrew Gottlieb served in 2006 as chief of Commonwealth Development, a “super secretary” cabinet position that Romney established to oversee the state’s housing, environment, and energy offices. Patrick eliminated the post when he took office. Gottlieb, then just 43 years old, began collecting $44,029 per year. He is in line to collect more than $530,000 in pension payments before reaching age 55.

Patrick has decried these sorts of huge payouts to people still in their prime earning years, but his own pick to oversee the state’s spending of federal stimulus dollars, Jeffrey Simon, cashed in on a termination pension when he was fired in the mid-1990s as director of the Massachusetts Government Land Bank.

Last year’s reform bill eliminated termination pensions for elected officials, a number of whom had begun collecting generous payments after losing reelection bids or simply opting not to seek a new term. But state leaders left untouched the broader statute that allows all other state workers to cash in. More than 400 state employees have done just that over the last eight years, according to state retirement board records.

Michael Widmer, president of the Massachusetts Taxpayers Foundation, calls the termination provisions “a total giveaway” and says last year’s reform bill failed to get the job done. “All the publicity was focused on the legislative abuses, but the most extensive abuse has been in the executive branch,” he said. “The larger problem was totally ignored.”

Michael Jonas is executive editor of CommonWealth magazine, published by the nonpartisan public policy think tank MassINC. He can be reached at mjonas@massinc.org. A longer version of this story is available at www.commonwealthmagazine.org.

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